US president Donald Trump’s new global tariff has been introduced at 10%, despite him saying he would impose a 15% rate.
After the Supreme Court blocked most of the global tariffs announced by Trump last year on Friday, the president said he would introduce a global tariff of 10% under Section 122 of the 1974 Trade Act which allows him to apply a levy for 150 days without the approval of the US Congress.
On Saturday, Trump announced the tariff would be increased to 15%. With the UK having negotiated a 10% rate, this would have meant increased costs for British businesses.
The British Chamber of Commerce (BCC) calculated that a 15% tariff would increase the levies raised from UK exports to the US by between £2 billion to £3 billion, a rise that would have to be absorbed by UK exporters, US importers or their customers.
However, the tariffs were introduced at 0500 GMT on Tuesday at a 10% rate.
William Bain, BCC head of trade policy, said while the introduction of a 10% tariff will provide relief for businesses, there is still “fresh uncertainty”.
“It is far from clear what will happen next, and whether a higher tariff rate is still on the way,” he said. “Despite the immediate reprieve, there is fresh uncertainty for UK firms exporting goods to the US.
“This makes it very difficult for firms to understand the prices and margins they will be able to secure for their goods, currently under production, for export in several months’ time. Inevitably this will have an impact on their sales and hit the economy.
“The risk of further tariff pain to come is still real and the government must do everything it can to prepare for the worst.”
The business group has called on the govenrment to implement a plan to protect against the worst economic outcomes from the new tariffs and potential further hikes.
The asks include continued negotiation with the US government, engagement with the US Congress, an uplift in UK Export Finance capacity and reviewing the UK’s global tariffs.